NEWS

Market Analysis

A recent interview with David Harbord “Can renewable energy kick-start Colombian ecotourism?“, published by Business News Americas on 31 January 2014, discusses the creation of a nonprofit foundation Ferdescol (Fundacion de Energias Renovables y Desarrollo Sostenible en Comunidades Colombianas) by Market Analysis Ltd. in collaboration with Baker & McKenzie S.A.S. Its purpose is to promote renewable energy and sustainable development projects in remote Colombian communities. Our initial aims are to provide solar panels and a water desalinization plant to a small community of 15-20 indigenous Wayuu families living near Rio Hacha in Colombia’s northern Guajira department. An article – “Renewables to spawn Colombia ecotourism” – accompanying the interview appeared on the BN Americas website on 30 January 2014 and is available here. A Spanish language version of the interview “Podra la energia renovable hacer despegar el ecoturismo en Colombia?“ can be downloaded by clicking on the link.

We are in the initial stages of setting up the Ferdescol foundation and seeking funding from government and international agencies, and from energy companies in Colombia. Baker & McKenzie S.A.S. is providing pro bono legal services. For more information visit our website www.ferdescol.org or contact David Harbord or Lucia Martínez.

A report by David Harbord and Marco Pagnozzi for the Colombian Commission for the Regulation of Energy and Gas “Second Review of Firm Energy Auctions in Colombia” was published on 18 December 2012. The report contains our analysis of Colombia’s second firm energy, or electricity generation capacity, auctions held in December 2011 and January 2012, and recommendations for improving the performance of future auctions.

The report examines the feasibility of private investment in wind power in Colombia within the existing regulatory framework. It focuses especially on the regulatory methodology for estimating the “firm energy” that wind power plants are capable of providing in Colombia to back up hydro generation during extended periods of drought (El Nino weather events). Our conclusion is that the current methodology probably underestimates wind’s firm energy contribution, and this in turn means that wind power stations receive a lower firm energy payment than they should. This is an important barrier to investment in wind power in Colombia and the report recommends that the Colombian Government reconsider their methodology for estimating the firm energy capacity of wind power and of other (non hydro) sources of renewable power.

The report was commissioned by the UK Foreign and Commonwealth Office’s Latin America Prosperity Fund and builds on previous work on this topic funded by the World Bank.

A series of reports by Market Analysis and the Brattle Group, prepared for the Colombian Commission for the Regulation of Energy and Gas (CREG), on gas market auction and secondary market design are now available on the Publications/Reports and Submissions section of our website.

In January 2011, Market Analysis, in collaboration with the Brattle Group, was awarded two consultancy contracts by the CREG. One of the contracts was to design and implement auctions for the Colombian upstream gas market. A second contract involved making detailed recommendations for introducing open and transparent long-term and short-term secondary markets for gas and transport contracts.

A third contract for standardizing gas supply and transport contracts in Colombia was awarded to Dr. Paul Milgrom of Auctionomics in collaboration with FTI Consulting.